BOARD MEETING DATE: June 1, 2007
AGENDA NO. 14
Refurbish the Hydrogen Generation Facility at AQMD
SYNOPSIS:
The AQMD, in partnership with Hydrogenics Corporation (formerly Stuart Energy Systems) installed a hydrogen generation and fueling station at AQMD Headquarters. A failure of one of the two cell stacks has occurred, creating additional stress on the remaining stack and components. The manufacturer strongly recommends replacement of both cells. The refurbishment will include two new cell stacks and two additional spare stacks. This action is to issue a purchase order with Hydrogenics to refurbish the facility in an amount not to exceed $43,000 from the Clean Fuels Fund.
COMMITTEE:
Technology, May 25, 2007. Less than a quorum was present during the discussion of this item. The Chairman communicated his concurrence and recommendation that this item be forwarded for Board consideration.
RECOMMENDED ACTION:
Authorize the Procurement Manager to issue a purchase order to Hydrogenics Corporation to refurbish the AQMD hydrogen generation cell stacks in the amount not to exceed $43,000 from the Clean Fuels Fund.
Barry R. Wallerstein, D.Env.
Executive Officer
Background
The AQMD, in partnership with Hydrogenics Corporation (formerly Stuart Energy Systems), installed a hydrogen generation and fueling station at AQMD Headquarters. This system uses electrolysis of water to produce the hydrogen and includes the capability to produce backup electrical power using a hydrogen-powered internal combustion engine. This system has been used extensively by the AQMD hydrogen-powered vehicle fleet and other hydrogen vehicles for other demonstration programs throughout Southern California. The hydrogen fuel quality has been tested and shown to meet the needs of fuel cell vehicle manufacturers and of the AQMD. AQMD has become a vital location as part of the California Hydrogen Highway network.
Recently, a routine inspection of the station led to the discovery that one of the two cell stacks has failed and cannot be repaired. As a result, the remaining cell stack is working twice as hard to produce almost the same amount of hydrogen needed to keep the AQMD fleet operating. Running the unit with only one cell doubles the stress on the unit and can cause subsequent premature failure of other components, such as compressor, valves, filters and electronics. The manufacturer strongly recommends replacing both cells to prolong the operability of the whole system.
Proposal
The life expectancy of electrolyzer cell stacks for this particular model is approximately 10,000 hours. The first stack failed at 11,000 hours, so the remaining stack may be nearing the end of its operating life. The manufacturer has offered two brand new cells and an additional two newly refurbished cells to the AQMD for the price of one cell plus installation. The two new cells will be installed, bringing the present production of 50 % capacity to 100 % design capacity. The newly refurbished cells will be placed in inventory and act as spares, which should allow the station to run at full capacity for another three years. With the installation of the new cell stack, the number of inspections per month and adjustment to compression springs will be increased to expand the life of the cell stacks. As hydrogen and fuel cell demonstration projects near the end of their expected life and technology advancements continue, staff will consider proposing a broader study of future regional needs, including upgrading of AQMD and other southern California stations.
This action is to authorize the Procurement Manager to issue a purchase order to Hydrogenics for the refurbishment of the AQMD hydrogen generation cell stacks in the amount of $43,000 from the Clean Fuels Fund.
Sole Source Justification
Section VIII.B.2. of the Procurement Policy and Procedure identifies four major provisions under which a sole source award may be justified. This request for a sole source award is being made under the following provisions:
B.2.c. (1): The unique experience and capabilities of the proposed contractor or contractor team, B.2.c. (2): the project involves the use of proprietary technology; and B.2.c. (3): the contractor has ownership of key assets required for project performance (replacement parts and system components). Hydrogenics Corporation purchased Stuart Energy, the original manufacturer and installer of the equipment hydrogen generation equipment, and assumed control over all Stuart Energy assets and employees. With few exceptions, the individuals that designed, built and installed the hydrogen generator at the AQMD are still employed by Hydrogenics Corporation. The AQMD has an outstanding preventative maintenance and service agreement with Hydrogenics Corporation in the event of equipment failure or breakdown. They are well qualified to service and maintain this equipment and they are the only source with direct access to the necessary parts and first-hand experience with the operation and repair of that equipment. They are the only manufacturers of this type of electrolysis equipment and to go with another manufacturer would incur significantly greater cost and longer time to have the system restored to full operating capacity.
Benefits to AQMD
AQMD’s Clean Fuels Program has been active in funding the development and demonstration of low emission, hydrogen fuel technologies within its Technology Advancement Office. The AQMD has also supported a number of activities directed to commercialization of low-emission hydrogen fuel technologies. For these programs to be successful, fleets and other vehicle users must be able to rely on reliable hydrogen refueling facilities. The proper operation of the AQMD existing station must be ensured. The primary benefit of this project will be to help resolve our own hydrogen refueling station challenges. This project is included in the Technology Advancement Office 2007 Plan Update under “Develop and Demonstrate Distributed Hydrogen Production and Fueling Stations.”
Resource Impacts
This action is requesting the Board to authorize the Procurement Manager to issue a purchase order to Hydrogenics Corporation for the refurbishment of the AQMD hydrogen generation cell stacks in the amount of $43,000 from the Clean Fuels Fund.
The Clean Fuels Fund was established as a special revenue fund resulting from the state-mandated Clean Fuels program. The Clean Fuels Program, under Health and Safety Code Sections 40448.5 and 40512 and Vehicle Code Section 9250.11, established mechanisms to collect revenues from mobile sources to support projects to increase the utilization of clean fuels, including the development of the necessary advanced enabling technologies. Funds collected from motor vehicles are restricted, by statute, to be used for projects and program activities related to mobile sources that support the objectives of the Clean Fuels Program.